What’s going to happen to the federal health law? The quick answer is no one knows. But in the midst of the uncertainty about the Affordable Care Act, states still must govern their insurance markets. Most have been muddling through with the 2017 status quo, but Minnesota is a special case, taking three unusual actions that are worth a closer look.

Last month, Minnesota:

Passed a one-time bailout for some consumers in the individual insurance market dealing with skyrocketing premiums.

Laid the groundwork for a sort of homegrown “public option” insurance plan.

Here’s more on each item.

The Bailout

Faced with some of the country’s highest hikes on premiums in the individual market — 50 to 67 percent, on average — Minnesota lawmakers passed a bailout for people who earn too much to qualify for the Affordable Care Act’s federal tax credit. The $300 million law will cut monthly 2017 premiums by 25 percent for about 125,000 Minnesotans.

Democratic Gov. Mark Dayton backed the measure since October when he called the ACA “no longer affordable to increasing numbers of people.” But passage wasn’t assured as both houses of Minnesota’s legislature are controlled by Republicans.

It is thought to be the second time a state has offered up state tax dollars to stabilize an insurance marketplace created by the ACA. (Alaska came up with a $55 million bailout for insurers in 2016.)

Bare-Bones Coverage

A failed amendment to the Minnesota legislation sought to strip dozens of so-called “essential benefits” from health plans with the expectation that slimmed-down coverage would cost less.

Republican State Rep. Steve Drazkowski, who offered the amendment, said he was trying to eliminate the current, “government-controlled, one-size-fits-all, dictating set of mandates.

“What we’re doing is trying to create an environment that, if and when the ACA goes away, that Minnesotans will have the freedoms they need in order to start to bring some free-market competition, some free-market ingenuity and innovation into the health insurance market,” he said.

The laundry list of benefits that consumers could choose to have covered or not under Drazkowski’s amendment included maternity care, diabetes treatment and mental health care among many others. Some items on the list are very specific: Lyme disease, prostate cancer screenings, outpatient surgery.

Dayton and other Democrats opposed the amendment and it dropped out of the final legislation.

Still, it caught the eye of Minnesota native Andy Slavitt, who is the former administrator of the Centers for Medicare & Medicaid Services, which oversee the health law marketplaces. Slavitt, who tweeted about the amendment, said it is a cautionary tale about high-deductible catastrophic

Still, it caught the eye of Minnesota native Andy Slavitt, who is the former administrator of the Centers for Medicare & Medicaid Services, which oversee the health law marketplaces. Slavitt, who tweeted about the amendment, said it is a cautionary tale about high-deductible catastrophic plans that cover little or no basic care.

Democratic Gov. Mark Dayton backed the measure since October when he called the ACA “no longer affordable to increasing numbers of people.” But passage wasn’t assured as both houses of Minnesota’s legislature are controlled by Republicans.

It is thought to be the second time a state has offered up state tax dollars to stabilize an insurance marketplace created by the ACA. (Alaska came up with a $55 million bailout for insurers in 2016.)

Bare-Bones Coverage

A failed amendment to the Minnesota legislation sought to strip dozens of so-called “essential benefits” from health plans with the expectation that slimmed-down coverage would cost less.

Republican State Rep. Steve Drazkowski, who offered the amendment, said he was trying to eliminate the current, “government-controlled, one-size-fits-all, dictating set of mandates.

“What we’re doing is trying to create an environment that, if and when the ACA goes away, that Minnesotans will have the freedoms they need in order to start to bring some free-market competition, some free-market ingenuity and innovation into the health insurance market,” he said.

The laundry list of benefits that consumers could choose to have covered or not under Drazkowski’s amendment included maternity care, diabetes treatment and mental health care among many others. Some items on the list are very specific: Lyme disease, prostate cancer screenings, outpatient surgery.

Dayton and other Democrats opposed the amendment and it dropped out of the final legislation.

Still, it caught the eye of Minnesota native Andy Slavitt, who is the former administrator of the Centers for Medicare & Medicaid Services, which oversee the health law marketplaces. Slavitt, who tweeted about the amendment, said it is a cautionary tale about high-deductible catastrophic plans that cover little or no basic care.

A recent change in how Medicare pays for joint replacements is saving millions of dollars annually — and could save billions — without impacting patient care, a new study has found. But the man whom Donald Trump has picked to be the secretary of the Department of Health and Human Services has vocally opposed the new mandatory payment program and is likely to revoke it.

Under the new program, Medicare effectively agrees to pay hospitals a set fee — a bundled payment — for all care related to hip- or knee-replacement surgery, from the time of the surgery until 90 days after. Traditionally hospitals collect payments for many components of care and rehabilitation individually.

Tom Price, M.D., the president elect’s HHS nominee, a congressman from Georgia and a very affluent orthopedic surgeon, has actively opposed the idea of mandating bundled payments for these orthopedic operations, calling it “experimenting with Americans’ health,” in a letter to the Medicare agency just last September. In addition, the agency which designed and implemented the experiment, the Center for Medicare and Medicaid Innovation, was created by the Affordable Care Act to devise new methods for encouraging cost-effective care. It will disappear if the act is repealed, as President-elect Trump has promised to do.

The study appeared Jan. 3 in the Journal of the American Medical Association. Though one of its authors is Ezekiel Emanuel, M.D., a professor at the University of Pennsylvania who helped design the ACA, the research relies on Medicare claims data from 2008 through mid-2015, long before the presidential election.

Starting in April 2016, CMS required around 800 hospitals in 67 cities to use the bundled payment model for joint replacements and 90 days of care after the surgery as part of the Comprehensive Care for Joint Replacement program. The program had previously been road-tested on a smaller number of hospitals on a voluntary basis, which formed the focus of the research.

The study found that hospitals saved an average of 8 percent under the program, and some saved much more. Price has been skeptical that bundled payments did save money, but the researchers estimate that if every hospital used this model, it would save Medicare $2 billion annually.

The bundled payment program works like this: For some specific kinds of medical procedures, including joint replacements or some heart surgeries, the Centers for Medicare & Medicaid Services will add up the costs for the entire episode, from the hospital stay and medical supplies to the rehabilitation afterwards. If the total costs are below a target set by CMS, the hospital gets to keep the savings. If not, the hospital has to pay Medicare the difference. It’s supposed to incentivize more efficient spending and better care coordination between providers, so they can lower costs.

In practice, it seems to be working. Baptist Health System, a network of five hospitals in San Antonio, saved an average of $5,577 on each joint replacement without sacrificing the quality of care, according to the study. Baptist was an early adopter of bundled payments; it began experimenting with them in 2008. Over seven years, the hospital system has cut Medicare’s costs on knee replacements by almost 21 percent.

The savings came without impacting quality. Patients at Baptist Health System were just as likely to be readmitted to the hospital or end up in the emergency room as patients nationally. There was some indication that quality of care may be better, fewer patients under bundled payments had long, extended hospital stays.

In Price’s letter from September, he said that Medicare had exceeded its powers in imposing such bundled payments, which he said took decisions out of the hands of doctors and patients.

That doesn’t seem to be the case, according to Amol Navathe, M.D., an assistant professor of medicine and health policy at the University of Pennsylvania, and one of the authors of the JAMA study. Instead, Navathe and his colleagues suggest that the bundled payments actually fostered greater collaboration between surgeons, administrators and patients because programs could only succeed in saving money if physicians were engaged in creating standardized pathways for care.

For example, the Baptist Health System saved about 30 percent on implant costs, around $2,000 on each artificial joint, by using the least expensive medically equivalent implants as determined by the hospitals’ surgeons.

Usually, physicians are prevented from benefitting when hospitals save money because of anti-kickback laws. Waivers under bundled-payment models mean that surgeons can put in the time to find the best, most cost-effective implants, and share in some of that savings.

“It takes that extra level of effort and coordination, and proactively communicate with [patients],” Navathe said. “Preplanning, setting of expectations and communicating up-front is resource intensive, when they have the incentive to do that they were willing to expend the extra resources to make that happen.”

When bundles included care after a patient’s hospital stay, spending on rehabilitation went down 54 percent. That’s because hospitals took the time to match patients to the right level of care, Navathe said.

Patients who didn’t need to stay in a nursing home or rehab center were set up with home health care or physical therapy.

Price has objected to CMS making bundled payments mandatory, calling it an instance of federal overreach. But bundled payments only work if everyone has to participate, according to Darshak Sanghavi, M.D., the former director of prevention and population health at the Center for Medicare and Medicaid Innovation.

If hospitals can choose whether or not to participate, only the ones that are already delivering care efficiently –and coming in under CMS’s cost target — will use bundles and Medicare will constantly be paying out bonuses. The system needs to be mandatory, Sanghavi said, to pull in less efficient hospitals and give them incentive to change.

“Stopping the programs for ideological reasons I think impedes innovation in a way that is going to consign us to having really, really high costs of care that’s going to continue in the future,” Sanghavi said.

Bundled payments aren’t just for hip and knee replacements. On Dec. 20, CMS announced it would expand mandatory bundled payments to treatments for heart attacks, bypass surgery and cardiac rehab beginning in July 2017. In its waning days, the Obama administration is effectively throwing down the gauntlet to the incoming administration on bundled payments, one of its signature reforms.

The federal government has cut payments to 769 hospitals with high rates of patient injuries, for the first time counting the spread of antibiotic-resistant germs in assessing penalties.

The punishments come in the third year of Medicare penalties for hospitals with patients most frequently suffering from potentially avoidable complications, including various types of infections, blood clots, bed sores and falls. This year the government also examined the prevalence of two types of bacteria impervious to drugs.

Based on rates of all these complications, the hospitals identified by federal officials this week will lose 1 percent of all Medicare payments for a year — with that time frame beginning this past October. While the government did not release the dollar amount of the penalties, they will exceed a million dollars for many larger hospitals. In total, hospitals will lose about $430 million, 18 percent more than they lost last year, according to an estimate from the Association of American Medical Colleges.

The reductions apply not only to patient stays but also will reduce the amount of money hospitals get to teach medical residents and care for low-income people.

Forty percent of the hospitals penalized this year escaped punishment in the first two years of the program, a Kaiser Health News analysis shows. Those 306 hospitals include the University of Miami Hospital in Florida, Cambridge Health Alliance in Massachusetts, the University of Michigan Health System in Ann Arbor and Mount Sinai Hospital in New York City.

Nationally, hospital-acquired conditions declined by 21 percent between 2010 and 2015, according to the federal Agency for Healthcare Research and Quality, or AHRQ. The biggest reductions were for bad reactions to medicines, catheter infections and post-surgical blood clots.

Still, hospital harm remains a threat. AHRQ estimates there were 3.8 million hospital injuries last year, which translates to 115 injuries during every 1,000 patient hospital stays during that period.

Each year, at least 2 million people become infected with bacteria that are resistant to antibiotics, including nearly a quarter million cases in hospitals. The Centers for Disease Control and Prevention estimates 23,000 people die from them.

Infection experts fear that soon patients may face new strains of germs that are resistant to all existing antibiotics. Between 20 and 50 percent of all antibiotics prescribed in hospitals are either not needed or inappropriate, studies have found. Their proliferation — inside the hospital, in doctor’s prescriptions and in farm animals sold for food — have hastened new strains of bacteria that are resistant to many drugs.

One resistant bacteria that Medicare included into its formula for determining financial penalties for hospitals is methicillin-resistant Staphylococcus aureus, or MRSA, which can cause pneumonia and bloodstream and skin infections. MRSA is prevalent outside of hospitals and sometimes people with it show no signs of disease. But these people can bring the germ into a hospital, where it can be spread by healthcare providers and be especially dangerous for older or sick patients whose immune system cannot fight the infection.

The second bacteria measured for the penalties is Clostridium difficile, known as C. diff, a germ that can multiply in the gut and colon when patients take some antibiotics to kill off other germs. It can also spread through contaminated surfaces or hands.

While it can be treated by antibiotics, C. diff can also become so serious that some patients need to have part of their intestines surgically removed. C. diff can cause diarrhea and can be deadly for the elderly and other vulnerable patients.

C. diff has challenged infection control efforts. While hospital infections dropped 8 percent from 2008 to 2014, there was a “significant increase” in C. diff that final year, the CDC says. AHRQ estimated there were 100,000 hospital cases last year.

“The reality is we don’t know how to prevent all these infections,” said Louise Dembry, M.D., a professor at the Yale School of Medicine and president of the Society for Healthcare Epidemiology of America.

The Hospital-Acquired Condition Reduction Program also factors in rates of infections from hysterectomies, colon surgeries, urinary tract catheters and central line tubs. Those infections carry the most weight in determining penalties, but the formula also takes into account the frequency of bed sores, hip fractures, blood clots and four other complications.

Specialized hospitals, such as those that treat psychiatric patients, veterans and children, are exempted from the penalties, as are hospitals with the “critical access” designation for being the only provider in an area. Of the remaining hospitals, the Affordable Care Act requires that Medicare penalize the 25 percent that perform the worst on these measures, even if they have reduced infection rates from previous years.

That inflexible quota is one objection the hospital industry has with the penalties. In addition, many hospitals complain that they are penalized because of their vigilance in detecting infections, even ones that do not cause any symptoms in patients. Academic medical centers in particular have been frequently punished.

“The HAC penalty payment program is regarded as rather arbitrary, so other than people getting upset when they incur a penalty, it is not in and of itself changing behavior,” said Nancy Foster, vice president for quality and patient safety at the American Hospital Association.

Federal records show that 347 hospitals penalized last year will not have payments reduced because their performance was better than others. Those include Harbor-UCLA Medical Center in Los Angeles, the Johns Hopkins Hospital in Baltimore and the University of Tennessee Medical Center in Knoxville.

Over the lifetime of the penalty program, 241 hospitals have been punished in all three years, including the Cleveland Clinic; Intermountain Medical Center in Murray, Utah; Ronald Reagan UCLA Medical Center in Los Angeles; Grady Memorial Hospital in Atlanta; Northwestern Memorial Hospital in Chicago; and Brigham & Women’s Hospital in Boston.

The penalties come as the Centers for Medicare & Medicaid Services also launches new requirements for hospitals to ensure that the use of antibiotics is limited to cases where they are necessary and be circumspect in determining which of the drugs are most likely to work for a given infection. Hospitals will have to establish these antibiotic stewardship programs as a condition of receiving Medicare funding under a regulation the government drafted last summer.

Lisa McGiffert, who directs Consumers Union’s Safe Patient Project, said that as a result of Medicare’s penalties and other efforts, “more hospitals are thinking more about appropriate use of antibiotics.” However, she said, “I think most hospitals do not have effective antibiotic stewardship programs yet.”

When Medscape reported on the nomination of Tom Price, M.D., to be secretary of health and human services, an internist commenting on the story wrote, “FINALLY.”

Many physicians expect that Congressman Tom Price, M.D., a former orthopedic surgeon and longtime promoter of the economic and other interests of physicians, will, in the words of Medscape, “rescue them from the burdens of Medicare reporting programs, the swift transition to value-based payments, and doctors’ growing inability” to make more money.

American physicians are by far the highest paid in the world.

In fact, Dr. Price is probably in the best position to make these changes and may eventually succeed, says Joe Antos, PhD, a health-policy expert at the American Enterprise Institute, a conservative think tank. But he adds that making such changes would be very challenging and could well take years to accomplish.

As HHS secretary and a physician, Dr. Price could take “a more active role” in the Centers for Medicare & Medicaid Services (CMS), which reports to HHS and creates many of the policies that concern physicians, Joe Antos, a health-policy analyst at the conservative American Enterprise Institute, says.

“Previous HHS secretaries often didn’t have the experience to interpret the complexities of CMS policies and regulations,” Mr. Santos told Medscape. “Price is a clear exception.”

Patrice A. Harris, M.D., chairwoman of the American Medical Association (AMA), is a psychiatrist from Dr. Price’s home state of Georgia and has known him for 15 years. “Dr Price has always been willing to listen and to hear both sides of an informed debate,” she told Medscape.

Several commentators have predicted that Dr. Price would stop CMS’s move toward value-based payments, which reward quality and outcomes, and return to fee-for-service payments, which comprise the most lucrative system for physicians.

The Centers for Medicare & Medicaid Services has released two new patient-engagement models from the CMS Innovation Center. The models — the Shared Decision Making Model (SDM) and the Direct Decision Support Model (DDS) — will encourage more shared decision-making.

The idea is to improve care and better control spending to improve the overall health of the Medicare population.

The SDM Model tries to combine a ‘’Four Step’’ process with routine clinical-practice workflows of physicians in Accountable Care Organizations. Beneficiaries can discuss treatment options with their clinicians during in-person visits.

The DDS Model, for its part, is aimed at engaging beneficiaries outside of the clinical setting. Beneficiaries will get “patient-friendly material’’ on their conditions to help them more intelligently talk with their clinicians about treatment options.

CMS says that of the 35 million Medicare patients eligible for CCM programs, the agency has only received reimbursement requests for about 100,000 patients.

What might be scaring the practices: A CCM program can be resource- and labor-intensive to start and patients may bear some costs in the form of co-pays for services provided between point-of-care visits.

Still, for a practice not to launch risks losing it tens of thousands of dollars per month in value-based reimbursements as Medicare payment reform and its Merit-based Incentive Payment System (MIPS) goes into effect soon (unless the Trump administration gets in the way). And, Medical Economics notes, many of the feared challenges to launching a CCM program can be overcome at relatively modest costs and effort with the help of a partner.”

In September, the federal government denied Arizona and Ohio’s requests to adopt strict eligibility requirements for their Medicaid programs.

Surprising many observers is that in the third year into Medicaid expansion under the Affordable Care Act, some Republican-led anti-ACA states have kept asking the Centers for Medicare & Medicaid Services for waivers that the Feds have repeatedly refused.

“It’s clear there’s an ideological component,” Jesse Cross-Call, a health policy analyst for the left-leaning Center on Budget and Policy Priorities told Governing magazine. CMS has made it clear that certain requests won’t be approved, “and state legislators know that, but they feel they should ask anyway.”

Governing reported:

“To encourage the {Medicaid-expansion} holdout states, the federal government let them tailor their Medicaid programs using a Section 1115 Waiver. Six states (Arkansas, Indiana, Iowa, Michigan, Montana and New Hampshire) have used the waiver to expand Medicaid while adding tweaks to appease their more conservative legislators. Those commonly include charging premiums, enrolling beneficiaries on the private marketplace and eliminating non-emergency medical transportation.

“But states can’t make just any changes they want. They have to be approved by the Feds — and they often aren’t.”

Researchers and physicians at The Johns Hopkins Hospital, in Baltimore, are challenging the wildly accepted idea that readmissions are an accurate measure of quality. The Centers for Medicare & Medicaid services has put much emphasis on the need to reduce hospital readmissions.

In a study this month in Journal of Hospital Medicine, hospitalist Daniel J. Brotman, M.D., and his colleagues looked at nearly 4,500 acute-care hospitals’ hospital-wide readmission rates and compared them with those hospitals’ mortality rates in six areas used by the Centers for Medicare & Medicaid Services: heart attack, pneumonia, heart failure, stroke, chronic obstructive pulmonary disease, and coronary-artery bypass.

They found that hospitals with the highest readmission rates were more likely to show better mortality scores in patients treated for heart failure, COPD and stroke.

And adjusted odds ratios indicated that patients treated at hospitals with more readmitted patients had a fractionally better chance at survival than patients cared for at hospitals with lower readmission rates.

The Centers for Medicare & Medicaid Services has announced that it will let providers choose the level and speed at which they comply with the new payment-reform model that emphasizes the medical value/outcomes of patient care over the volume of procedures. In the current, predominately “fee for service” system, the more procedures that providers order, the more they get paid. That is one reason that America’s physicians are by far the highest paid in the world.

And so eligible physicians and other clinicians next year will be given four options to comply with such new payment schemes such as the Merit-based Incentive Payment System (MIPS) or an alternative payment model (APM), such as Accountable Care Organizations.

Modern Healthcare reported that under MIPS, physician payments “will be based on a compilation of quality measures and the use of electronic health records. About 90 percent of physicians are expected to pursue MIPS because a qualifying APM requires a hefty amount of risk.

“In the first option offered Sept. 8, any data reported will allow providers to avoid a negative payment adjustment. The goal is to ease providers into broader participation in the following two years, ” the publication reported.

The second option lets providers submit data for a reduced number of days. “This means their first performance period could begin later than Jan. 1 and that practice could still qualify for a small payment if it submits data on how the practice is using technology and how it’s improving,” Modern Healthcare reported.

The AHA has again asked the Centers for Medicare & Medicaid Services to delay implementing the site-neutral provisions of the Bipartisan Budget Act next Jan. 1, citing potential risk for hospitals to violate the Stark law and Anti-Kickback statute.

Under the site-neutral rule, CMS would pay for services rendered in hospital outpatient departments at the same, lower rate it pays for treatment in physicians’ offices. The proposal has engendered controversy since its announcement, with physicians and hospitals taking opposing views.

The AHA now has further ammunition in its push to delay the rule’s implementation. Parts of the rule would apparently make hospitals vulnerable to punishment under laws restricting hospitals’ provisions of free goods or services to referring physicians.

The AHA analysis concludes that hospitals could unfairly suffer by bearing the extra cost of operating their outpatient departments at ”no cost to physicians.”